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From Health Law Daily, June 7, 2013

Georgia hospital merger halted; FTC administrative law judge to consider FTC complaint

By Paul Clark

The Hospital Authority of Albany-Dougherty County, Georgia, and the Phoebe Putney Health System have agreed to halt the integration of the former Palmyra Park Hospital -- now known as Phoebe North -- with Phoebe Putney Memorial Hospital, while an administrative law judge considers a Federal Trade Commission complaint challenging the merger as anticompetitive.

According to the FTC, the administrative trial is scheduled to begin on August 5, 2013.

A June 4, 2013 order from Judge W. Louis Sands of the U.S. District Court for the Middle District of Georgia, also prohibits Phoebe Putney from --

  1. transferring or selling any assets of Phoebe North;
  2. causing or permitting the destruction, removal, wasting, or deterioration, or otherwise impairing the viability or marketability of Phoebe North;
  3. eliminating, transferring or consolidating any clinical service or department that is offered at Phoebe North, unless required to protect patient safety of to comply with Medicare and Medicaid laws;
  4. modifying, changing, or canceling any physician privileges other than at the request of the physician;
  5. terminating employees or reducing employee compensation levels currently in effect for employees working at Phoebe North; or
  6. making any price changes to, or terminating, or causing or allowing termination of any contract between any Health Plan and Defendants that includes Phoebe North.

In February, the U.S. Supreme Court determined that the hospital authority violated anti-competition laws and was not subject to state-action immunity (Federal Trade Commission v Phoebe Putney Health System, Inc., February 19, 2013). State-action immunity is generally disfavored under federal antitrust laws. Because the state did not affirmatively express a state policy to displace competition when it granted the hospital authority general corporate powers, the Supreme Court reversed an Eleventh Circuit decision granting the hospitals’ motion for summary judgment.

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